Financial Contrast: Private Bancorp of America (OTCMKTS:PBAM) and First Financial Bankshares (NASDAQ:FFIN)

First Financial Bankshares (NASDAQ:FFIN) and Private Bancorp of America (OTCMKTS:PBAM) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Risk and Volatility

First Financial Bankshares has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Private Bancorp of America has a beta of 0.02, suggesting that its share price is 98% less volatile than the S&P 500.

Profitability

This table compares First Financial Bankshares and Private Bancorp of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Bankshares	31.00%	14.20%	1.76%
Private Bancorp of America	24.01%	16.38%	1.66%

Institutional & Insider Ownership

69.8% of First Financial Bankshares shares are held by institutional investors. Comparatively, 13.5% of Private Bancorp of America shares are held by institutional investors. 3.8% of First Financial Bankshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares First Financial Bankshares and Private Bancorp of America”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Bankshares	$833.20 million	5.58	$253.58 million	$1.84	17.65
Private Bancorp of America	$172.31 million	2.39	$40.67 million	$6.93	10.39

First Financial Bankshares has higher revenue and earnings than Private Bancorp of America. Private Bancorp of America is trading at a lower price-to-earnings ratio than First Financial Bankshares, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for First Financial Bankshares and Private Bancorp of America, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Bankshares	0	3	1	0	2.25
Private Bancorp of America	0	1	2	1	3.00

First Financial Bankshares presently has a consensus price target of $37.33, indicating a potential upside of 14.98%. Private Bancorp of America has a consensus price target of $77.33, indicating a potential upside of 7.41%. Given First Financial Bankshares’ higher probable upside, research analysts plainly believe First Financial Bankshares is more favorable than Private Bancorp of America.

Summary

First Financial Bankshares beats Private Bancorp of America on 10 of the 15 factors compared between the two stocks.

About First Financial Bankshares

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company offers checking, savings and time deposits; automated teller machines, drive-in, and night deposit services; safe deposit facilities, remote deposit capture, internet banking, mobile banking, payroll cards, funds transfer, and performing other customary commercial banking services; securities brokerage services; and trust and wealth management services, including wealth management, estates administration, oil and gas management, testamentary trusts, revocable and irrevocable trusts, and agency accounts. It also provides commercial and industrial, municipal, agricultural, construction and development, farm, residential, and consumer auto and non-auto, as well as non-owner occupied and owner occupied commercial real estate loans. In addition, the company offers advisory and specialized services related to asset management, investing, purchasing, advertising, public relations, and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.

About Private Bancorp of America

Private Bancorp of America, Inc. operates as the bank holding company for CalPrivate Bank that provides banking products and services to individuals and businesses in California. The company offers checking and savings, money market, certificate of deposit, sweep, zero balance, and individual retirement accounts; unsecured lines of credit, personal credit lines, and term loans; additional services, such as direct deposits, online banking, ATM and debit cards, credit cards, savings/line of credit overdraft protection, and safe deposit boxes; and certificate of deposit account registry services. It also provides treasury management, merchant card, bill pay, positive pay, e-statement, remote deposit capture, ACH origination, wire transfer, electronic payments and collections, electronic check acceptance, account reconciliation, cash vault, and gift and business credit cards, as well as funds management services. In addition, the company offers term credit facilities and loans, equipment and business expansion loans, working capital lines of credit, commercial real estate financing, construction financing, letters of credit, business start-up loans, loans for business acquisition and partner buyouts, owner-occupied commercial real estate loans, equipment, furniture and fixture, and other loans; and CDARS And ICS products. Further, it provides wealth management and legal services. The company has offices in La Jolla, San Diego, Coronado, Newport Beach, Beverly Hills, El Segundo, Temecula, Mission Valley, and Redlands. Private Bancorp of America, Inc. was founded in 2006 and is headquartered in La Jolla, California.